It was planned that the LDP would form the core of the main opposition coalition, the Koalisyon ng Nagkakaisang Pilipino (KNP). However, members of the party disagreed on which person to support for president. Panfilo Lacson, a member of the party, advanced his candidacy for president but was not considered by Edgardo Angara, the president of the party. Angara supported Fernando Poe, Jr. Together with the party's secretary-general Agapito "Butz" Aquino, Lacson gathered the support of some members of the party and went ahead with his candidacy. The LDP was subsequently polarized between those supporting Angara and Poe, and those for Lacson and Aquino.

By then, Poe and Lacson have both filed their certificates of candidacies. According to the rules of candidacy, every presidential candidate must have a political party to back him or her. With the obvious split within the ranks of the LDP, and with no signs that the two factions would come to an agreement, the COMELEC decided to informally split the party into the Aquino and the Angara wings. Lacson then ran under the LDP - Aquino Wing, and Poe under the LDP - Angara Wing, which would later become the KNP.

During the campaign period, there had been numerous unification talks between the two factions. The opposition saw the need to become united under one banner to boost their chances of winning the presidential election against the organized political machinery of Arroyo. The plans of unification did not materialize due to the stubbornness of both Poe and Lacson. Lacson wanted Poe to concede to him and run as his vice-presidential candidate while the supporters of Poe wanted Lacson to back-out from his candidacy and instead support Poe, citing his low performance in the surveys.

Gloria Macapagal-Arroyo - former President of the Philippines. She quit the party in early 1997 to form her own political party, Kampi.

Vicente Sotto III - Senator, LDP member from 1992-1997 and left together with Arroyo to form Kampi. However during the Estrada administration he returned to the party before and left again in 2007 to join the Nationalist People's Coalition.